Business to hold Govt to its goal of returning to surplus

Business New Zealand will be closely scrutinizing this week's Budget for signs of job creation, and the Government's will to return to surplus.

Finance Minister Bill English delivers what is expected to be another near-zero Budget on Thursday - meaning any new spending by departments will have to be offset by cuts elsewhere.

The Government has been sticking to its target of returning to surplus by 2014 - 15, even after revised figures in April showed a deterioration of about $1 billion in the budget balance over that period.

Business New Zealand says businesses will be holding the Government to its pledge of returning to surplus.

Chief executive Phil O'Reilly says a zero budget doesn't necessarily mean that there's no new spending in some areas, rather a return to more quality spending and more details are likely to be released in the budget.

Mr O'Reilly says the Prime Minister has also signalled there will be new spending in research, science and technology and further details on that will give businesses more confidence about the future.

He says job creation will be a critically important focus of the budget.

Mr O'Reilly says Business New Zealand has been pushing Government and officials to have a much sharper focus on job creation when they develop policies.

He says a key question when developing policy should be: "What will this do to get a business person to invest a dollar faster or to hire a person that they might not have otherwise hired?"

The Government's already indicated it'll need tight control over spending for the foreseeable future to meet the surplus target.

While unions argue it could ease up on the target, and relax the spending shackles, Mr O'Reilly says that's not the right approach because it will have a negative effect on business confidence.

He says if the Government moves away from its target, it signals that people don't need to be serious about saving because the Government's not serious about its target.